Landlords: no EPC = no tenant
An Energy Performance Certificate (“EPC”) is not only beneficial in ensuring homes meet efficiency targets but it allows occupiers to identify areas for improvement when it comes to energy consumption.
The Energy Efficiency (Private Rent Property) (England and Wales) Regulations 2015, also known as Minimum Energy Efficiency Standard Regulations (MEES), applies to both domestic and non-domestic property (residential and commercial) and relates to the minimum energy efficiency standards required in order to let properties in England and Wales. So, what do you need to know and more importantly, do?
1st April 2016: Domestic Property
Tenants are able to request their landlord’s consent to make energy efficient improvements to the Property, despite the terms of their lease.
1st April 2018: Non-Domestic and Domestic Property
Prohibition on the granting of a new lease on sub-standard property.
1st April 2020: Domestic Property
Prohibition of continuing leases of sub-standard domestic properties.
1st April 2023: Non-Domestic Property
Prohibition of continuing lease of sub-standard non-domestic property.
What does this mean for me as a landlord?
If a property’s rating is F or G on a valid EPC, it’s deemed sub-standard in respect of energy efficiency. Firstly, you must decipher whether your property falls under the Domestic or Non-Domestic category. Either way, your EPC certificate must be valid (which it can be for 10 years). If the regulations apply to you, check that the relevant date for these standards has come into force and, before completing any work, check whether your property is exempt under the ‘Exemptions’ section of the regulations.
If improvement work is completed and yet the rating has not improved, the property may be deemed exempt. You will therefore need to register it on the PRS Exemption Register.
How much will this cost?
Landlords are no longer eligible for government ‘green deal funding’ and for non-domestic property you will need to pay for any improvement work yourself. For domestic properties, the rules are not as clear cut. However, the regulations suggest that only if funding is obtained should the landlord complete improvements.
How long do I have to make these improvements?
There is no specified timescale indicated under these regulations. However, landlords risk a civil penalty of up to £5,000 for domestic property and a maximum of £150,000 for non-domestic property if they do not meet the standards.
The enforcement does require trading standard officers to have notice of any breach and, aside from the inspection of properties, it is difficult to envisage exactly how these regulations will be enforced. However as with any regulation, err on the side of caution. The government has signaled this change to the sub-standard rating and it is sure to continue to progress.
How can I make sure I do this correctly?
Whether an existing or prospective landlord, you may wish to consider the drafting of the terms of any new lease. This includes addressing whose obligation it is to obtain an EPC and who pays for any improvement work. You will also need to consider cost; although these regulations aim to improve energy efficiency under the Energy Act 2011 in the long-term, in the short term it can prove costly and with no clear structure of any funding scheme.
How Barcan+Kirby can help you
Our property lawyers can assist you with not only these EPC regulations but property checks, tenancy agreements and buy-to-let mortgages.